Prime Highlights:

Medicare will now cover Eli Lilly’s Zepbound for obstructive sleep apnea, following FDA approval.

Coverage may require prior authorization under Medicare Part D to ensure proper use.

Key Background:

Eli Lilly’s Zepbound, initially approved for obesity treatment, has gained attention for its new indication in treating obstructive sleep apnea (OSA). The Food and Drug Administration (FDA) granted approval for Zepbound as the first drug therapy for moderate-to-severe OSA, a condition affecting approximately 20 million Americans. This approval opens the door for Medicare drug plans to cover the medication when prescribed for OSA, a medically recognized condition.

Zepbound’s introduction into the Medicare Part D drug plans follows its FDA clearance in December 2023. However, the coverage applies only when the drug is used for a medically accepted indication beyond weight loss, in this case, the treatment of OSA. According to CMS guidelines, Medicare Part D plans may require prior authorization for coverage to ensure the drug is being prescribed for its approved purpose. The price of Zepbound, which can exceed $1,000 per month before insurance, has sparked high demand since its launch.

Medicare’s decision to include Zepbound for sleep apnea treatment aligns with previous coverage decisions for other obesity drugs, such as Novo Nordisk’s Wegovy, which is covered when prescribed for cardiovascular purposes. Both Eli Lilly and Novo Nordisk are conducting studies to explore their respective weight loss drugs as potential treatments for conditions like fatty liver disease, chronic kidney disease, and sleep apnea, with hopes of securing additional FDA approvals for these indications.

The coverage policy for Zepbound may also affect state Medicaid programs, where coverage will depend on the specific condition being treated and whether Eli Lilly has signed a Medicaid drug rebate agreement.

This decision highlights a growing trend toward expanding the availability of obesity medications for multiple health conditions, though broader coverage for weight loss remains limited in many insurance plans. The Biden administration’s proposed rule, which could allow Medicare and Medicaid to cover weight loss drugs for patients with obesity, is still under review and could lead to wider access for millions of patients.